Our objectives are to study the mechanisms of Hedgehog signal transduction in Drosophila and how Hedgehog signaling affects cell proliferation in the Drosophila ovary. Hedgehog family proteins are secreted molecules that instruct cell fate during development and can regulate cell proliferation even in adult organisms. These activities of Hedgehog (Hh) molecules are seen in many organisms from Drosophila, where Hh was first identified, to vertebrates including fish, frogs, mice and humans. In humans various defects in the Hh signaling pathway cause developmental abnormalities principally involving limbs, brain and facial structures (Holoprosencephaly, Grolin's syndrome, Greig's cephalopolysyndactyl, Pallister-Hall syndrome). In addition, a few specific cancers are associated with aberrantly activated Hh signaling pathway. Indeed, basal cell carcinoma, which is very widespread, is thought to be initiated exclusively by aberrant Hh signaling. The study of Hh signaling in Drosophila has brought many insights into the transduction process by which cells respond to a Hh signal and has also provided insight into how cells behaviors are altered by Hh signaling. The relative facility and sophistication of Genetic and Developmental analyses that are possible in Drosophila ensure that the pioneering role of such studies will continue. Subsequent studies have shown that most of the components and mechanisms of Hh signal transduction elucidated in Drosophila can also be demonstrated in vertebrate model organisms. In particular the role of Protein Kinase A (PKA) in silencing Hh signal transduction in the absence of a Hh signal is apparent in Drosophila and vertebrates. Our study of this role of PKA recently implicated additional protein kinases as regulators of Hh signaling. In this proposal we will define the role of these protein kinases and PKA in Hh signaling. We also found that Hh regulates proliferation in the Drosophila ovary by acting specifically on stem cells. We will define which other signaling pathways regulate these stem cells and how Hh alters their behavior. These studies are likely to be directly relevant to the behavior of human stem cells that give rise to hair follicles and epidermis and should help us to understand how basal cell carcinomas can originate from those stem cells or their derivatives.